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Brexit: The aftermath!

The UK has decided by popular vote to leave the EU – a result that is being heralded one of the biggest disasters to face the EU bloc. As markets react and the British Pound dropped to its lowest level against the US Dollar in 31 years, business owners are starting to face a reality where trading in and out of the UK could alter radically, as the repercussions of a “Leave” vote are starting to be felt globally.

So what happens now?

The short answer is that we don’t quite know yet. The UK will now have to enter into negotiations with the EU. However, to exit the EU, the UK will have to invoke Article 50 of the Lisbon Treaty (for the first time in EU history), to begin a formal process of withdrawal, which can last up to 2-years and is even extendable beyond that period. During this time, the terms of exit will be negotiated between the UK and the EU and, after the period expires, EU treaties governing EU membership no longer apply to the UK.

But how will Brexit affect intellectual property?

For patents, national UK patent legislation will remain largely unaffected by a Brexit, and the UK remains a member of the Patent Co-operation Treaty (PCT) and the European Patent Convention (EPC); meaning that patent protection in the UK can still be pursued nationally and internationally as before.

However, the coming into effect of the proposed Unitary Patent could now be delayed. Given that the Unitary Patent is intended to take effect across the whole of the EU, the exit of the UK from the EU means that the Unitary Patent will no longer take effect in the UK, and applicants for Unitary Patents should consider national UK validation (as well as national validation in Spain and Croatia, who are also not participating in the Unitary Patent) of European Patents alongside unitary effect.

The Unitary Patent is dependent on the coming into effect of a Unified Patent Court (UPC), of which the UK was a compulsory member required for ratification. Without UK participation, the establishment of the UPC could be dramatically delayed as the preparatory committee of the UPC look to make Italy a compulsory ratification member in the place of the UK. Even when established, this means that claimants will have to start parallel proceedings in the UK and the EU and that the UK Courts will no longer be in a position to grant pan-EU injunctions.

For trademarks, the exit of the UK from the EU erodes the unitary EU rights afforded by European Union Trademarks (EUTMs), which will no longer take effect in the UK after exit. It is proposed that there will be a transitional provision to allow for conversion of existing EUTMs to corresponding UK trademark registrations. Trademark owners should now consider applying for national UK trademark registrations to supplement EUTMs or International Registrations designating the EU (or designating the UK in the International Registrations). National UK trademarks should be relatively unaffected.

Existing EUTM proprietors must also consider that any EUTMs relying on use solely in the UK could now become vulnerable to cancellation if the use in the UK is no longer deemed genuine use within the EU. Trademark owners should now consider whether it is possible to put trademarks to use in another EU member state to avoid applications to cancel the EUTM, or indeed if strategic new filings are appropriate.

For designs, national UK design law is unlikely to change, but the geographical scope of protection of Community Designs (both registered and unregistered) will no longer include the UK after exit.

Even if there is a transitional provision to allow for conversion of existing Community Design Registrations (CDRs) to corresponding UK design registrations, design owners will have to consider applying for national UK design registrations to supplement CDRs. Proprietors using the Hague system of international design registration will likewise have to pursue protection through national UK Design Registrations because the UK is not a participating member of the Hague system.

Designers who rely on unregistered community designs will no longer benefit from making a design available to the public within the UK to establish unregistered Community Design right, and should consider how designs can be disclosed outside the UK to benefit from unregistered Community Design right.

So what should I do now?

Right now? Stay Calm! No intellectual property rights will cease to exist in the immediate future. However, as the aftermath of the Brexit unravels, intellectual property owners should now determine a strategy to ensure those rights previously and currently existing in the UK are not forfeited upon exit of the UK. National UK applications should be considered as a central part of a European intellectual property strategy.

Compare jurisdictions: Patents

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